Following today’s release of Sainsbury’s figures for 52 weeks ending 1 March 2025; Eleanor Simpson-Gould, senior retail analyst at GlobalData, a leading data and analytics company, offers her view: “FY2024/25 has been a year of positive momentum for Sainsbury’s, with total retail sales up 3.1%, boosted by steady growth in its grocery division of 4.5%. However, Sainsbury’s non-food division remains weak, with stagnant sales in its general merchandise & clothing segment and a decline of 2.7% in Argos. The grocers’ retail underlying profit increased 7.2% to £1.0bn, driven by investment in its Nectar360 loyalty platform. Into the new financial year, Sainsbury’s is cautious in its profit outlook, expecting flat growth. Sainsbury’s will face further costs, in addition to those from National Insurance contributions this next financial year, amid plans to open 15 new supermarkets and 25 convenience stores in FY2025/26. Within the grocery sector, Sainsbury’s is holding its own, and we anticipate it will gain share in 2025. Sainsbury’s must expand SKU coverage of its loyalty scheme pricing, especially as Sainsbury’s is perceived as a more expensive grocer (despite its TV advertising). The intense focus on food required to drive volume growth in this new year may further hinder growth in its Argos and general merchandise categories. Momentum in design and availability within the grocer’s clothing proposition will be essential to offset its ailing non-food performance.
“Sainsbury’s grocery sales have outperformed the UK food & grocery market, which grew by 1.9% during the comparative period. Although Sainsbury’s growth is just shy of Tesco’s performance of 4.9% (for the 52 weeks to 22 February 2025), we estimate a 0.3ppts uplift in market share in 2024. The grocer has made strides in its pricing competitiveness through Nectar Prices and supplemented this with over 1,300 new products launched this year (over 600 lines were Taste the Difference). Sainsbury’s Nectar loyalty scheme participation reached 85% during the period. It plans to enhance its loyalty scheme visibility instore through enhanced branding and media. This decision is apt, considering rivals ASDA and Tesco are also leveraging their loyalty programs for growth this year. Despite anticipated food inflation, we do not foresee significant switching between grocers, as seen in 2023. Sainsbury’s must prioritise messaging around Nectar pricing and Taste the Difference quality to drive volumes and increase average basket spend.
“Sainsbury’s achieved an impressive 12.3% growth in clothing sales during Q4, boosting total clothing sales for the year to +2.9%. Key to its commendable performance in clothing sales have been enhancements to its womenswear and essentials ranges, which achieved almost 5.0% and 4.0% growth, respectively. Against a struggling UK clothing & footwear market, in which sales declined 4.1% during the period, this performance is noteworthy and suggests the grocer is successfully honing its range and designs. Though this is a positive turnaround for one element of Sainsbury’s non-food offer, there will be mounting pressure later this year as Tesco launches its F&F clothing range to its Marketplace format. Sainsbury’s must ramp up the visibility of its Tu range on Argos.co.uk to compete with Tesco’s growing omnichannel strategy.”
